Will Silicon Valley make a play for finance?

Amazon used to be an online bookseller. Now, it publishes books too, and has innovated the industry with the creation of its Kindle e-reader. And it doesn’t just sell books – those days are long behind it – now it sells pretty much any product you could need. Even cloud computing and media services. Google is no different: its search-and-advertising business may still be its mainstay, but it sells mobile phones, smart thermostats, is creating a self-driving car… the list goes on. How long until Facebook and Apple – turn their attention to finance?

Amazon, Alphabet, and Facebook have seen strong performance this year

SOURCE: Yahoo Finance

Speculation that big tech companies could enter the world of financial services has been going round for some time – but it got a boost recently when a top U.S. regulator said that rules separating banks from commerce should be reexamined. If Google can offer a better financial service than traditional providers, shouldn’t consumers be able to access it?

Mitch Siegel, head of U.S. financial services strategy at KPMG, said: “The lines are already blurring. Things like payments and lending almost just disappear because they’re so embedded into our commerce experiences.” And he’s right: the titans of Silicon Valley already facilitate payments and offer loans to small businesses. Online payment juggernaut PayPal was originally part of Ecommerce platform eBay.

For now, the reams and reams of regulation required to set up as a bank probably makes things like self-driving cars and online grocery services easier paths to growth. But as these options become exhausted, and Silicon Valley’s “small-scale” finance goals are achieved (Amazon, for example, is rumoured to be launching a credit card) how long will it be before Big Tech offer more than just loans and mobile wallets?

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